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Is McDonalds Outsourcing their Drive-Thru Windows?
The rumor I heard was that McDonalds would be outsourcing the job of taking orders at the drive-thru window to some company in North Dakota, because the minimum wage in North Dakota is only $5.15, whereas it's higher in other states, so they figure they can save some money. In other words, you could be going through a drive-thru in San Diego and giving your order to some guy in North Dakota. This struck me as very odd. But it appears that the story is basically true, except that McDonalds denies that its reasons for doing this has anything to do with trying to pay their employees less. They claim that when employees have to take orders over the drive-thru mic and deliver food at the same time, they start making a lot of mistakes. So this is just an effort to make the system more efficient. Maybe. But I've read Fast Food Nation so I know that McDonalds is one of the worst companies in terms of underpaying their employees, and I'm guessing that they are hoping this will reduce labor costs.
Business/FinanceFood
Posted by The Curator on Fri Mar 18, 2005


P MAN said:

"They actually believe that someone completely undistracted and doing something they do every single day, over and over again is going to be more accurate and faster than an employee taking orders while trying to prepare massive ass orders where most of the sandwiches have to be made special, over and over and over and over and over and over and over again, while being glared at by bitchy ass customers on the front counter who believe they could do better, and who will never respect him because he works fast food, all while being lectured by his manager about how he expects him to get the drive thru times down."

Well, yeah, OR they're a bunch of cheap corporate fucks who want to pay people as little as possible, regardless of whether it's a living wage of not. Yeah, there's that.
Posted by Cranky Media Guy  on  Tue Apr 12, 2005  at  03:41 AM
I bet you also believe taht RC cars will land jumps, coke will quench my thirst and make me blissfully happy, deoderant choices will get me laid, beer will make women attracted to me, politicians are respectable people, phillip-morris wants people to quit smoking, gatorade will make you glow, shoes will give me
endurance, having genital herpes is no reason that you won't find a boyfriend who is a model, acne will go away, clothes will make you look good, pills will make you happy, and car dealerships want to make YOU a good deal.

Commercials are always crap. Stop babbling about how corporations are out to *gasp* make money, and start doing something about it like a) not eating mcdonalds, b) getting other people to not eat mcdonalds, c) understand why corporations have unfair advantages over other businesses, and d) organize a PAC or something to demand repeal of all the legislation that creates their unfair advantage.

Good luck, because it's going to be hard. I have 5 - 1 odds, you won't do more than 1 of those things for over a month, and be back on here bitching about the next travesty McDonald's does. The only fast food bludgeoning I can think of is "the enormous omelette sandwich"; that thing just LOOKS nasty. ugh! thus, began my boycott of BK.

Anyway, Spurlock said it in SS Me, you're not going to change corporate behavior, unless you can change consumer behavior. Thus your angst should be less dedicated to the board and CEO of McDonald's, but rather to the entire population of America, including our government officials.
Posted by bobbo  on  Mon Apr 18, 2005  at  11:35 AM
And as far as a living wage is concerned... ??!?!?!

Ah, i get so frustrated with this mentality. Ok, I used to know a guy who managed a McDonald's. He said that their margin of profit isn't that great. That's why they're only supposed to give you ketchup packets if you ask, because they destroy the profit margin when they give everyone 4 or more packets of ketchup. Now imagine what giving every minimum wage employee 2 extra dollars an hour would do? There would be less mcdonalds, and certainly fewer employees. Even still, there are fast food employees I encounter who I feel aren't worth 5.15 an hour for their service. Paying them 7.15 won't make them into better workers magically; however, I would assume their would be less of these positions; so now the incompetant worker you wanted to see "fairly treated" is now in the unemployment line, milking up tax money ineffeciently.

Here's a better idea, everytime YOU go to McDonald's, give the workers and extra $20 tip for their invaluable service they so sweetly earned.

I would also like to point out that the government is historically the worst business in history.
Posted by bobbo  on  Mon Apr 18, 2005  at  11:49 AM
not to mention $5.15 an hour isn't so bad until it magically turns into $3.89 an hour - Thanks Uncle Sam!!!
Posted by bobbo  on  Mon Apr 18, 2005  at  11:53 AM
bobbo said:

"Ok, I used to know a guy who managed a McDonald's. He said that their margin of profit isn't that great. That's why they're only supposed to give you ketchup packets if you ask, because they destroy the profit margin when they give everyone 4 or more packets of ketchup."

I find that to be highly unlikely. At the prices they charge, they're THAT close to losing money on each burger? In other words, even at a volume of billions, their WHOLESALE cost is only about three cents below their RETAIL price? If I was a McDonalds stockholder (and if that were true), I'd be very concerned about it.

"Paying them 7.15 won't make them into better workers magically."

However, on the other hand, somehow paying them the lowest wage allowable by law gives them LOADS of motivation?

Do you remember the "sub-minimum wage" that was proposed several years ago by the Republicans? They referred to it as a "training wage." It was going to be a reduced rate of pay for the first six months of a person's employment. Mickey D's was very much in favor of that. Guess why. It had a LOT to do with the fact that the average McDonalds employee doesn't last more than six months.

Their employee turn-over, like Wal-Mart's, is huge, in some stores exceeding one hundred percent annually (in other words, some positions turn over more than twice per year on average).

Is it just possible that, with an actual living wage, they might not have so much turn-over? Wouldn't that lower their costs? Maybe they could even afford to not ration the catchup packets. Gee, you might even see some more competant workers since they would actually have been at their jobs for more than a few weeks.

"I would also like to point out that the government is historically the worst business in history."

Government is not a business. It doesn't exist to make a profit, just for starters. Duh.
Posted by Cranky Media Guy  on  Tue Apr 19, 2005  at  05:49 AM
JEEZ, PEOPLE -- THERE IS NO DEBATE ABOUT MCDONALD'S PAYING THE LOWEST WAGE POSSIBLE! BY VERY DEFINITION WHEN A COMPANY OUTSOURCES A PARTICULAR TASK - THEY PAY A CONTRACT RATE. THEY DON'T PAY INDIVIDUAL EMPLOYEES. WHOMEVER IS THE OUTSOURCED COMPANY IS RESPONSIBLE FOR PAYING THE EMPLOYEES. FROM A BUSINESS STANDPOINT, I THINK IT IS AN AWESOME IDEA. WAY TO GO MCDONALD'S FOR ONCE AGAIN BEING THE "FIRST" TO TRY SOMETHING NEW...AFTER ALL, WHERE WOULD WE BE WITHOUT HAPPYMEALS, COMBO MEALS AND DRIVE-THRU BREAKFAST????
Posted by Constance Williamson  in  Lexington, Kentucky  on  Tue Jun 21, 2005  at  09:58 AM
1) Please don't shout.
2) There clearly is a debate, as the last two pages show. Whether or not there needs to be one is a different matter.
3) It's hardly the first time jobs have been outsourced.
4) We'd be in exactly in the same place, but possibly less cholesterol-riddled.
Posted by Boo  in  The Land of the Haggii...  on  Tue Jun 21, 2005  at  10:05 AM
NO THERE IS NO DEBATE - PAY ATTENTION - MCDONALD'S IS NOT PAYING THE EMPLOYEES OF THE OUTSOURCED COMPANY - SO THERE IS NOT A DEBATE AS TO WHETHER OR NOT THEY ARE DOING THIS IN AN EFFORT TO PAY THE LOWEST POSSIBLE WAGE - IN ACTUALITY - THIS WAS INVESTMENT. THEY ARE HOPING THEIR ROI IS REALIZED IN 9 TO 12 MONTHS.
Posted by Constance Williamson  in  Lexington  on  Tue Jun 21, 2005  at  12:37 PM
There is a debate - people have been debating it on these very pages. Perhaps you should pay attention to what I'm saying.
There may not need to be one, but since I can see the proof at this very moment, it's ludicrous to say otherwise.

And again, it's considered rude to type in all caps - the online equivilant of shouting - and people are more likely to take you seriously if you don't.
Posted by Boo  in  The Land of the Haggii...  on  Tue Jun 21, 2005  at  12:44 PM
BY VERY DEFINITION, A DEBATE IS WHEN TWO OR MORE PARTIES DISAGREE ON AN ISSUE. HOWEVER, SINCE THE ISSUE IS MOOT, THERE IS NO DEBATE. AGAIN, MCDONALD'S IS NOT PAYING THESE PEOPLE, SO YOU CANNOT DEBATE THAT WHICH DOES NOT EXIST.

PS: GET OVER YOURSELF WITH TYPING IN ALL CAPS, MY PP IS SET TO ALL CAPS AND I AM NOT CHANGING IT TO APPEASE YOU!
Posted by Constance Williamson  in  lexington  on  Tue Jun 21, 2005  at  04:46 PM
A debate is when two or more parties disagree.
Which has been going on for the last two pages.
You may be right, but that doesn't mean that there has been no debate.

Get over myself? I'm just speaking for all the people who appreciate not being 'shouted' at over the internet.

I've been nothing but polite to you, so I can't help thinking that my thinking of you as rude has just been confirmed.

I understand your point, but that's no excuse.
Posted by Boo  in  The Land of the Haggii...  on  Tue Jun 21, 2005  at  04:56 PM
Ok 1st of all i dont know who Constance Williamson is but McD is paying for the outsource servie they give to SEI. They pay a couple million every quarter. I work one floor below the outsourced copmany being talked about. 2ns the employees getting hired by SEI are getting paid more than 5.15 an hour try more like 7 dollars, most of the people working there are stil in High school. I have lived in ND my whole life if I cold have gotten paid 7 bucks and hour in high school I would have been in heaven, and the fulltimers get full benifits. 3rd lets talk about cost of living in ND is a hell of alot less than Cal. or NY. 4th the idea McD had on this was not to pay less but to cut stress on order errors that come through the drive thru and the amout of time you have to wait in the D/T and so far it has worked great for them. So for all of your bad mouthing hear are the fact and keep that in mind next time you pull into McD drive thru you might just be talking to me on the end of that speaker, and keep in mind that befause of me you don't have to sit on your ass in your car as long waiting for your big mac..
Posted by in the know  in  north dakota  on  Wed Jun 22, 2005  at  12:27 AM
Even if a McDonalds resturant is a franchise, they wouldnt exactly pay for a system upgrade, which is what this is. For example, Wendy's is in the process of replacing all their grills with new doublesided grills, but individual stores arnt paying for the upgrade, Wendy's Inc. is. They want to improve apon the the quaility of their meat and insure that it is cooked properly and served at the correct temperature, just as McDonalds wants to reduce the amount of incorrect orders. Im certain that McDonalds corperate will do the same thing, instead of requiring each store to pay for it.
Posted by Dts  on  Thu Aug 11, 2005  at  08:53 PM
I have actually worked on a similar project and I have something new you may want to consider.

The reason for doing it is NOT to save money on labor. Although they can spread out the talking to customers bit so that they don't need one person per store, It still takes somebody at the store to actually hand-out food, etc. Plus, there are expenses involved in running a call center, such as the location of the employees and infrastructure to make the connection, computers, and software to transmit orders back to the store (where the food is prepared and served). All things considered, it might cost slightly more to do it with a call center. Foremost among the reasons, is the desire to provide a CONSISTENT customer service experience. Imagine, one place where several people are taking all of the orders and being supervised in their work.

On a side note, keep in mind that McDonalds is one of those "for profit" companies and will probably abandon the idea if it doesn't seem to be working. As far as paying employees less, a similar project I know of is paying its employees the same rate as the store employee(which is low anyway, we're not talking about skilled labor).
Posted by JimmyD  in  Tucson  on  Tue Aug 30, 2005  at  05:02 PM
the technology would cost so much that i assume it would cost less just to have some one there. Think actually do something you have never done before they would have to buy the special equipment install it and possible shut down there drive thru service and then look for some in where ever and give them equipment to take the orders then send the orders back to the fast food place. And again "think" what if the equipment broke if its windows it will break. So no this is VERY VERY VERY unlikely to ever happen.
Posted by john  on  Wed Jan 18, 2006  at  09:19 PM
I work at a local Mcdonalds first of all. I am a salary assistant manager. I have been witht e same franschisee for the past year. We do not have this outsourcing crap. I just want to put to rest a few things. We do skimp on labor. The cost of putting out a DoubleCheeseburger(a double from here on out) is just as expensive as a DQPC(double quarter pounber with cheese) we dont sell many DQPC though. We seel alot of double, but when you make 5 cents profit on a double, you dont make a lot int he processs unless you sell alot. am we dont at MOST stores. Outsourceing would not make drivethru better. With a person taking your money and a person taking your order the people making your food communicate VERBALLY with the person you talk to. The only way to make this process better is to have SKILLED EXPERIENCED WORKERS working with you that communicate better. and yes if we payted more we could get more employees to stay long. But, we cant afford to do it. and also where i live is a beach a vacation area, which is automatically an expensive are. Therfore we pay 2 dollars more than the federal minumum wage. wqe pay 7.15.We have adults that make a living on our wages and htey live an hour away and communt EVERY SINGLE FUCKING DAY. everythign you all said is right and wrong at teh same fucking time, you guys make me sick talking asbout something you know nothin about. McDonalds has excenllent benefits...we just promoted 4 new manmagers in our store. The main reaosn people leave mcdoanlds is caus people like you tell them it is a shitty job to have. I can gurantee that 1/8th of all adult workers today have worked at or DO work at a mcdonalds. Thisa tell you that they earned as a guy said above "valuable career skills" People leave because they think it is a shitty job to have and leave cause they are whiny and bitching.
i have bee here a year and make already 10thou more a year than when i started.

if people would stay you would have faster service, ignoreing the need to outsoruceing(for the store that may do it) so....if the workers stayed longer, they would make more money and we would not have to outsorce.

DOES THIS MAKE SENSE PEOPLE or do i need to break it down further.

(and we do serve real beef grin)
Posted by brandon  in  Nags Head  on  Wed Jan 25, 2006  at  02:55 AM
brandon said:

"McDonalds has excenllent benefits."

Which apparently don't include paying for literacy lessons.

Are you claiming that NO McDonalds is using this long-distance drive-through thing? The fact is that at least a few Mickey D's in the Portland, OR area ARE using it (and possibly others elsewhere, too).
Posted by Cranky Media Guy  on  Wed Jan 25, 2006  at  03:08 AM
From Business 2.0 (magazine)'s annual 101 Dumbest Moments in Business:

33. It'll be even clearer when the accents are from Bangalore.

Several McDonald's outlets in the Pacific Northwest begin outsourcing drive-through functions to remote call centers staffed by "professional order-takers" with "very strong communication skills." Says CEO Jim Skinner, "If you're in L.A. and you hear a person with a North Dakota accent taking your order, you'll know what we're up to."
Posted by Cranky Media Guy  on  Wed Jan 25, 2006  at  07:22 PM
It makes sense from a language standpoint as well. Now McDonalds can hire employees that don't speak english with no problem because they could just be in charge of making and serving at the drive-thru window.
Posted by Razela  in  Chicago, IL  on  Wed Jan 25, 2006  at  11:38 PM
sadly most of you are not very well informed about most of this stuff...Yes we will be useing a remote drive thur...it has nothing to do with paying people less...its mostly to help out the small crew when they are short on people need help in a rush ect...to better handle the customers...it will cost us more the min wage in the long run...we will not be paying an hourly wage we pay by the order...its only being tested right now...we don't know if it will work out or not...you should look in to what your talking about before you pass jugment...Mc donalds is a gteat place to work i've been with them almost 9 years and most of my crew makes over $7.00 an hour...they have been with me from the this time the store opened almost three years ago...not all stores run as good as mine and not all crew is as good as mine...but there are good ones out there...alot of them...don't pass jugment because the one store you have been in was ran poorly there not all like that...
Posted by Mc Anthony  in  San Diego  on  Thu Jan 26, 2006  at  01:16 PM
Here's an article on cnn.com about fast food outsourcing:

http://www.cnn.com/2006/TECH/01/27/drivethru.evolution.ap/index.html
Posted by Cranky Media Guy  on  Tue Jan 31, 2006  at  07:11 AM
Who ever said these people were being paid 5.15 and hour? We don't know that. And if you want to go on with this "big businees" trying to saving money gag, it's a load of crock. Mcdonald's spends a lot of time and money on the service and just because one store can't get their act together does not mean that all of them suck. Outsourcing gives people jobs that cannot work at manual labor and who knows, maybe it is faster as long as the people are trained well. Just because you know nothing about the company that is providing the service does not mean that it is bad. Know your facts before you put something down.
Posted by Amber  on  Fri Mar 31, 2006  at  12:44 AM
Amber said:

"Who ever said these people were being paid 5.15 and hour? We don't know that."

Well, are you saying that the people at the remote location are making MORE money than people at a local restaurant would make? If you know how much the people at the remote location make, please inform us.

"And if you want to go on with this "big businees" trying to saving money gag, it's a load of crock. Mcdonald's spends a lot of time and money on the service and just because one store can't get their act together does not mean that all of them suck."

Do you honestly think that McDonalds has set up a remote location operation along with the electronics needed to make that work for the sake of a single location? My guess is that this is a pilot project to determine if this can be rolled out on a national level.

One of my objections to this is that McDonalds likes to run ads portraying them as a member of the local community; this project takes jobs OUT of the local community, hardly what I'd expect from a sincere member of the local area.

"Outsourcing gives people jobs that cannot work at manual labor and who knows, maybe it is faster as long as the people are trained well."

Are you saying that you think that McDonalds is employing the handicapped to work at the remote order-taking center? Do you know that for a fact? I would also point out to you that there are government subsidies available to companies that employ the handicapped. That means that McDonalds is using tax dollars--YOUR money, not theirs--to pay part of those employees' salaries. In other words, if they ARE using handicapped people at the remote order-taking center, they ARE doing this to cut expenses to themselves.

"Just because you know nothing about the company that is providing the service does not mean that it is bad. Know your facts before you put something down."

What facts have YOU offered to us in defense of McDonalds?
Posted by Cranky Media Guy  on  Fri Mar 31, 2006  at  02:59 AM
Well, lookie here:

http://www.nytimes.com/2006/04/11/technology/11fast.html?ei=5065&en=176335a14994b9d4&ex=1145332800&adxnnl=1&partner=MYWAY&adxnnlx=1144725478-vt6FdOoO2Tjowsw+J0aK7g&pagewanted=print

Check out the second-to-last paragraph. Yup, they'd doing it to cut jobs. I rest my case. NEXT!
Posted by Cranky Media Guy  on  Tue Apr 11, 2006  at  04:02 AM
I LOVE BOSNIA!!!
BORN IN BOSNIA
Posted by jale  on  Thu Apr 20, 2006  at  09:03 AM
I heard in Calgary, AB, because of the hot economy, Mickey D's is providing a significant premium in terms of wages to attract workers to their restaurants... unconfirmed reports of 12$ CDN / hr... so that's like almost double that north dakota rate...
Posted by mojo  in  bc, canada  on  Mon Apr 24, 2006  at  06:00 PM
You people have nothing better to do do you? Come on you act like mcdonalds is the worst place in the world right now. No, these people are not making more than the people in the store. No, I am not going to tell you what they make because all u are going to do is find excuses to badmouth this. The people in the stores are making more per hour. And FYI most of the stores that have outsourced their drive thrus have improved their time by at least 30 seconds per call. So if you wanna complain about it fine. Just don't come through the drive thru and expect them to be nice when all you wanna know is whether you're talking to someone in the store. It's people like you that give mcdonalds a bad name. If you don't like how they are run. Don't go there!!!!
Posted by Amber  on  Thu Apr 27, 2006  at  10:08 PM
Amber said:

"No, these people are not making more than the people in the store. No, I am not going to tell you what they make because all u are going to do is find excuses to badmouth this. The people in the stores are making more per hour."

Um, that would be the point of the criticism, Amber. They're doing this to eliminate jobs and pay the people still working for them less money. They're taking jobs OUT of the LOCAL communities even as they try to portray themselves as members of the local community. Seems more than a bit hypocritical to me.

By the way, I'd say it isn't an accident that the "pilot program" is taking place in the Portland, OR area. Oregon and the state directly across the river from Portland, Washington, have about the highest minimum wages in the U.S. McDonalds is too cheap to pay its employees a living wage.
Posted by Cranky Media Guy  on  Fri Apr 28, 2006  at  03:40 AM
I am a graduate student working on my Masters Thesis, and my primary area of work is on outsourcing and supply chain management. I have studied many examples of outsourcing and all the reasons for it, and every time it all comes down to one thing - cost. Remember folks, the purpose of a business is to make money. When a business has a line of products that is stagnant and is not growing, other methods have to be used to create revenue. Finding ways to cut costs is by far the easiest way to increase revenue, because if you don't have to pay for something, or can get it for cheaper, you've increased the amount of money you have left over at the bottom of the account page.

Think of McDonald's...they have a product line that has been maligned for being unhealthy for several years. Their stock value has dropped. People aren't visiting their franchises like they used to, and investors are afraid to invest due to fiscal uncertainty.

Now think about the typical drive through employee at McDonald's (my neighbor works as a drive through employee at my local Mickey D's, so I'll use her and her comments about her co-workers as an example)...Age ranges between teenager and late thirties, high school dropout (maybe a GED), no plans for the future, knows she can get a job doing the same thing elsewhere for the same pay, and therefore isn't too interested in providing the best fast food experience for the customer (which is what makes people WANT to come back). Can serve 160 customers per eight hour shift, and makes four mistakes during that time, all for $5.15 per hour. All around, doesn't really care about the job itself, the company or the customers.

Given this scenario, McDonald's comes across a service that provides a polite person who can serve 210 customers per eight hour shift (a 30% improvement), and makes one mistake during the same time (a 75% reduction in waste), and is paid $6.50 per hour (a number I have read somewhere). From a business standpoint, it only makes sense to outsource this function, even if it does cost slightly more. Given the increase in customers served, and the amount of waste saved, not to mention money lost due to the hassles of having to deal with late/sick/absent employees, training, payroll, taxes, and all of the other stuff that goes with having a real live person doing a job, it only makes sense.

Outsourcing is everywhere, and it's here to stay. As long as companies can find someone else to do a job more efficiently or for less money, the practice will continue.

If you want more information, I strongly suggest you read "The World is Flat", by Thomas Friedman. It's long, but excellent, and is where I first heard about Mickey D's outsourcing drive-through operations.

Peace out, and be nice to each other
Posted by Carl  in  Charlotte, NC  on  Mon Aug 07, 2006  at  03:52 PM
Carl, you are correct that a business needs to make a profit. A COMMUNITY, however, needs to have the people IN the community employed. If a business is sending jobs OUT of the local community, that is detrimental to the community and it is a rational reason for people to patronize other businesses.

Remember that McDonalds likes to protray itself as a member of the communities in which it operates. Many of their ads try to imply that Mickey D's "cares" about the towns and cities it is located in. I think it is perfectly reasonable for people to judge companies by their ACTIONS rather than their WORDS. If the two seem to be in opposition, I think it is also reasonable for people to come to the conclusion that the business does NOT actually care about them and that they should patronize someone else.

When big chains like McDonalds and Wal-Mart come into local communities, they tend to drive out locally-owned businesses. If the net effect of this is to make fewer jobs overall, I submit that the net effect is negative.
Posted by Cranky Media Guy  on  Mon Aug 07, 2006  at  09:33 PM
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